Financial Performance - Net loss for the three months ended September 30, 2024, was $298,188 compared to a net income of $73,099 for the same period in 2023, indicating a significant downturn [13]. - The company reported a net loss of $912,966 for the nine months ended September 30, 2024, compared to a net income of $3,278,853 for the same period in 2023 [13]. - For the three months ended September 30, 2024, the company reported a net loss of $20,243, compared to a net loss of $277,945 for the same period in 2023 [78]. - For the nine months ended September 30, 2024, the company reported a net loss of $98,440 for Class A common stock, compared to a net income of $1,867,301 for the same period in 2023 [79]. - The effective tax rate for the company was (6.83)% for the three months ended September 30, 2024, compared to 12.37% for the same period in 2023 [88]. Assets and Liabilities - Total assets decreased from $21,502,723 on December 31, 2023, to $9,603,939 as of September 30, 2024, representing a decline of approximately 55.3% [11]. - Current liabilities increased from $4,181,229 to $5,017,568, an increase of about 20% [11]. - Cash held in Trust Account decreased from $21,099,267 to $9,411,576, a reduction of approximately 55.5% [11]. - The company’s accumulated deficit increased from $21,033,991 to $23,634,821, reflecting a worsening financial position [11]. - Total liabilities decreased from $22,027,309 to $13,411,592, a reduction of about 39% [11]. - As of September 30, 2024, the Company had a working capital deficit of approximately $4.8 million and $192,363 in its operating bank account [49]. - The Company has accrued but unpaid income tax liability of $151,637 and franchise tax liability of $74,000 as of September 30, 2024 [46]. Stock and Securities - The weighted average shares outstanding of redeemable Class A common stock decreased from 4,154,572 to 859,414, a decline of about 79.3% [13]. - As of September 30, 2024, the company had 859,414 shares of Class A common stock subject to possible redemption, down from 1,984,568 shares as of December 31, 2023 [74]. - The Class A common stock subject to possible redemption as of September 30, 2024, is valued at $9,195,429 [132]. - The Company is authorized to issue 300,000,000 shares of Class A common stock, with a par value of $0.0001 per share [135]. - The Company has 15,675,000 warrants outstanding, each entitling the holder to purchase one Class A common share at a price of $11.50 [140]. Business Combination and Operations - The Company has not engaged in any operations or generated revenues since its inception on May 20, 2021 [23]. - The Company intends to complete a Business Combination before the mandatory liquidation date of December 31, 2024 [52]. - The Company has not selected a specific business combination target and has not engaged in substantive discussions regarding a business combination [22]. - The Company entered into a non-binding letter of intent for a potential business combination with Airspace Experience Technologies, Inc., which was terminated on December 1, 2023 [38]. - The Company entered into a Business Combination Agreement on March 18, 2024, involving CID HoldCo, Inc., ShoulderUp, and SEE ID, Inc. [124]. Trust Account and Cash Management - Following the IPO, $306,000,000 was deposited into a trust account, which may only be invested in U.S. government securities [29]. - The Company withdrew $2,786,344 from the Trust Account for tax liabilities since its IPO, with $2,526,664 remitted to tax authorities, leaving an excess of $259,680 [45]. - The Company withdrew $22,904,010 from the Trust Account following the redemption of shares, leaving $20,946,765 remaining [165]. - The Company has committed to maintain funds in the Trust Account in interest-bearing U.S. government securities until the earlier of the initial business combination or liquidation [120]. Regulatory and Market Status - The Company’s securities were delisted from the NYSE effective December 29, 2023, and began trading on the OTC market [41]. - The delisting from the NYSE may reduce the attractiveness of the company to potential business combination targets, adversely affecting the ability to complete an initial business combination [208]. - The company's common stock and warrants were delisted from the NYSE and now trade on the OTC, making them subject to state regulations for securities offerings [207]. - The potential classification as "penny stock" could lead to reduced trading activity in the secondary market for the company's securities [209]. - The SEC's rules on "penny stocks" may increase the costs and complexities associated with trading the company's securities [209].
ShoulderUp Technology Acquisition (SUAC) - 2024 Q3 - Quarterly Report